37 Questions
What is one of the determinants of elasticity for prescription drugs?
Availability of substitutes
In perfect competition, who sets the prices?
Companies
Which market structure promotes differentiation instead of standardized products?
Monopolistic competition
What is a characteristic of monopolistic competition?
Standardized and interchangeable products
Which type of market structure involves firms that are interdependent and set prices through price leadership?
Oligopoly
What is a characteristic of a monopoly?
Increase in price due to barriers to entry
Why does perfect competition have a horizontal demand curve?
"Price takers" companies
What kind of economics model does health care most likely fit?
Monopolistic competition
What is the economic term for the satisfaction obtained from the consumption of a good or service?
Utility
What are the three basic resources in economics?
Natural resources, Labor, Capital
What concept is determined by marginal utility in economics?
Value
Which economic concept states that the satisfaction received from obtaining one more unit of a good declines as one consumes more of it?
Law of Diminishing Marginal Utility
In economics, which resource is typically considered as money and physical resources?
Capital
What is the law that defines the quantity demanded of a commodity as inversely proportional to its price?
Law of Demand
What determines the personal desire for one more unit of a good or service according to the text?
Utility
What are costs proportional to according to the text?
Constraints
What happens to supply when the number of sellers in the market increases?
Supply increases
How do resource costs affect sellers' incentive to produce?
As costs increase, sellers make more profit
Which factor can lead to an increase in supply of brand name drugs?
Increase reimbursement to pharmacies for generics
In what situation do sellers typically produce more in preparation for future price increases?
When they expect prices to increase in the future
What does market equilibrium price represent?
The price where demand and supply curves intersect
Which type of demand is characterized by a decrease in overall revenue when prices increase?
Elastic demand
What factor makes a product's demand more elastic?
Availability of many substitutes
Which scenario would likely result in inelastic demand?
Demand for prescription drugs for life-threatening conditions
What does a supply curve show?
Quantity of a commodity that sellers are willing to supply at a given price
What happens when there is a change in quantity supplied?
The quantity supplied moves along the supply curve
Which of the following is not a factor that can change supply?
Prices for related goods
If technology advances, what is the likely impact on the cost of production?
Decrease in cost of production
How do seller's expectations impact the supply curve?
They can lead to an increase in quantity supplied at every price point
What happens when there is a change in supply?
The quantity supplied moves along the supply curve
How can an increase in resource costs affect the supply curve?
It may lead to a decrease in overall supply
What could make consumerism difficult in the health care market?
Incomplete information regarding price and quality
Why is it challenging to measure the quality of health care products and services?
Care is usually customized and individualized
What contributes to the inelastic demand in the health care market?
Consumer price sensitivity at the time of service need
Why is health care considered a 'right' by some individuals?
Health care is universally needed
What is a potential financial conflict of interest in the health care market related to supplier-induced demand?
Physicians controlling both supply and demand
How does third-party insurance contribute to patient-induced demand in health care?
By decreasing patient out-of-pocket expenses
Explore how the number of sellers in the market and resource costs impact supply. Learn how an increase in the number of sellers can lead to a rightward shift in supply, while changes in resource costs can affect producer incentives. Delve into examples to understand these concepts better.
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